April saw strong sales activity for ETFs investing in Canadian equities and cryptoassets, according to a report from National Bank of Canada.
A total of $4.5 billion flowed into Canadian ETFs in April, bringing the year-to-date inflow to $17 billion. Just over $2 billion flowed into equities ETFs, and Canadian equities funds “returned to prominence” with an inflow of $1.5 billion, National Bank reported.
The majority of flows went to broad-market Canadian equities funds, while sector ETFs attracted $462 million, led by technology and energy funds.
There were more modest inflows of $110 million and $60 million, respectively, to small-/mid-cap and value ETFs, while emerging markets and low-volatility ETFs saw outflows.
“Low-vol ETFs have experienced persistent outflows since the spring of last year when the stock market recovery began in earnest,” the report noted.
April once again saw robust flows into cryptoasset ETFs, which attracted $1.3 billion, bringing the category’s total assets under management to more than $2.5 billion.
In the crypto category, 3iQ “joined the fray” of Canadian ETF providers with two product launches — one investing in Bitcoin and the other in Ethereum. April saw 21 product launches overall, 14 of which were crypto funds.
Crypto ETF providers are now waiving management fees and capping management expense ratios in an attempt to gain market share, National Bank noted.
“In a high-speed re-enactment of the whole ETF industry’s history, fee competition in the crypto space has heated up as more products and providers are coming to market,” the report said.
A total of $717 million flowed into fixed-income funds in April, with the lion’s share going to Canadian aggregate, government and corporate bonds. There was a large outflow of $645 million from cash-alternative and high-interest savings account ETFs, National Bank noted.
“Investors have been deploying cash into other areas of the market to take on more risk while financial markets stabilize,” the report suggested.
Commodities funds had an outflow of $73 million despite the price of bullion recovering from March lows, National Bank reported.